I just starting receiving long term disability (LTD) payments and the bank wants to take the money that was just put into my account from the LTD carrier to pay a charged-off loan that I had with that bank. This happens to be my first payment and I didn't realize that the LTD carrier would be sending this money to my old checking acct. Does anyone know if this is legal? They have not taken the money yet, but they are threatening to and it is not in my hands yet.

A:

Yes, this is legal and probably part of the contract you made with your bank. You should immediately call and fax your disability insurance company and get them to either send you checks or direct deposit your money into another bank account.

You also should make arrangements to repay the bank. You made a promise when you borrowed the money.